20th December 2012

Director’s breach of duty to company can lead to personal liability for unfair prejudice to minority shareholders

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20th December 2012

Director’s breach of duty to company can lead to personal liability for unfair prejudice to minority shareholders

In the case of Maidment v Attwood and Others [2012] EWCA Civ 998, the Court of Appeal found that if a director’s conduct had been the cause of the company’s insolvent liquidation this was, on appropriate facts, capable of founding a direct claim against them by a minority shareholder which would otherwise have been entitled to a surplus distribution. On the facts, the case was sent back to the lower court to assess whether, if it had not been for the director paying himself excessive remuneration, failing to collect a licence fee on use of company trading style and selling assets at a value sufficient only to cover the winding up costs, the minority shareholder would have had valuable shares for which he should be compensated.

For this risk guide and risk guides and information on other business risk issues, please visit the ‘What’s New‘ section of the Paris Smith Business Club website.

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Director’s breach of duty to company can lead to personal liability for unfair prejudice to minority shareholders

Director’s breach of duty to company can lead to personal liability for unfair prejudice to minority shareholders